AAFX TRADING

Daily Market Lookup

  • Asian stocks rallied on Monday as positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks supported sentiment, although another defeat for British Prime Minister Theresa May’s proposed Brexit deal added to sterling’s woes. The markets took heart after China’s official purchasing managers’ index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March. A private business survey, the Caixin/Markit PMI, released on Monday also showed the manufacturing sector in the world’s second biggest economy returning to growth. If sustained, the improvement in business conditions could indicate that manufacturing is on a path to recovery, easing fears that China could slip into a sharper economic downturn. The United States and China said they made progress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their drawn out trade war. The greenback had benefited from the flagging pound, which was on track to post its fourth day of losses in the wake of the ongoing Brexit saga. Sterling took its latest knock after British lawmakers rejected Prime Minister May’s Brexit deal for a third time on Friday, sounding its probable death knell and leaving the country’s withdrawal from the European Union in turmoil.
  • Japanese manufacturing activity contracted at a slower pace in March than the previous month, but output fell at the sharpest rate in nearly three years, a private business survey showed on Monday, reflecting weak demand at home and abroad. The latest survey bolstered the view the Japanese economy, the world’s third largest, is hitting a soft patch as the Sino-U.S. trade war dents global demand, dealing a blow to export-reliant Japan and its business and consumer confidence. The final Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 49.2, up a tad from February’s final 48.9, which was also the flash reading for March. The survey suggests the worst quarterly performance in the manufacturing sector in January-March since the second quarter in 2016, as Japanese manufacturers face a “fiercely challenging” situation, said Joe Hayes, economist at IHS Markit, which compiles the survey.The output component of the final PMI index stood at 47.0, just above a preliminary 46.9 but still down from a final 47.4 in February to show the fastest contraction since May 2016. New orders from both domestic and international clients fell at the fastest pace since June 2016, the final survey showed. New export orders fell for a fourth straight month in March, though at a slower pace. The decline contributed to pushing the rate of job creation to the weakest since late 2016, it also showed. The trade war between the world’s two largest economies has also had a negative effect on Japan’s domestic growth, as a slowing Chinese economy curbed demand for mobile phone parts and chip-making equipment from Japan.
  • China’s manufacturing sector unexpectedly returned to growth for the first time in four months in March, in a sign that government stimulus measures may be slowly gaining traction, a private business survey showed on Monday. But growth in new domestic and exports orders was marginal, suggesting the economy will remain under pressure in coming months and will likely require more policy support before it can convincingly stabilize The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) expanded at the strongest pace in eight months in March, rising to 50.8 from 49.9 in February, above the neutral 50-mark dividing expansion from contraction on a monthly basis and the highest level seen since July 2018 Economists polled by Reuters had forecast the reading for March would stay unchanged at 49.9. The surprise expansion seen in the Caixin survey echoed that seen in the official PMI released on Sunday, which also showed factory activity defying expectations for another contraction in March. China has made proposals in talks with the United States on a range of issues that go further than it has before, including on forced technology transfer, as the two sides work to overcome obstacles to a deal to end their protracted trade war, U.S. officials told Reuters on Wednesday. But sources close to the talks have stressed that a deal is by no means certain, and tit-for-tat tariffs on both sides have remained in place. Caixin’s findings showed factories hired workers in March for the first time in over four years, arresting a relentless spell of job shedding since October 2013. Some firms were hiring to support higher production and new business development, the release said.
  • Oil prices gained on Monday in Asia as supply concerns continued to provide support to the market. The upcoming Sino-U.S. trade talks in Washington is expected to receive some attention this week. OPEC, which together with some non-affiliated producers like Russia, known as 'OPEC+', agreed late last year to reduce output by 1.2 million barrels per day (bpd) to remove a glut and prop up prices. Last week, U.S. President called upon OPEC+ to bring more crude on to the market to help bring down increasing oil prices. However, his comments had little impact on the oil markets and the reaction of OPEC+ has been muted so far. U.S. sanctions on Iran and Venezuela, both oil exporters, have also contributed to a tighter market. Meanwhile, fresh data on U.S. commercial crude inventories and production activity will also capture the market's attention this week. Baker Hughes said on Friday that U.S. energy firms last week reduced the number of oil rigs operating to the lowest level in nearly a year. Meanwhile, the Energy Information Administration reported last week that U.S. crude supplies unexpectedly rose by nearly 2.8 million barrels. Market players will also be watching for any important developments on the U.S.-China trade front. Chinese Vice Premier Lui He will travel to Washington this week to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for further talks. The U.S. and China are the world’s two largest oil-consuming nations.

 

 
Intraday RESISTANCE LEVELS
1st April 2019 R1 R2 R3
GOLD-XAU 1,294-1,300 1,309 1.316-1,325
Silver-XAG 15.30-15.60 16.00 16.40-17.00
Crude Oil 60.20 61.00 61.64-62.50
EURO/USD 1.1270-1.1305 1.1330 1.1350-1.1380
GBP/USD 1.3070-1.3120 1.3200 1.3250-1.3300
USD/JPY 111.00 111.40-111.90 111.50

Intraday SUPPORTS LEVELS
1st April 2019 S1 S2 S3
GOLD-XAU 1,284-1,276 1,269 1,261
Silver-XAG 15.00 14.75 14.50-14.00
Crude Oil 59.50-59.00 58.00 57.50-57.00
EURO/USD 1.1200-1.1175 1.1150 1.1100
GBP/USD 1.3010-1.2981 1.2900 1.2850
USD/JPY 110.60-110.02 109.55 109.05-108.45

Intra-Day Strategy (1st April 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1299.74/oz and low of US$1286.65/oz. Gold up by 0.151% at US$1292.03/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1278) and breakage below will call for 1254-1247. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1276-1261 with risk below 1261, targeting 1294-1300-1309 and 1316-1325. Sell below 1294-1325 keeping stop loss closing above 1325, targeting 1284-1276 and 1269-1261.

 
Intraday Support Levels
S1     1,284-1,276
S2     1,269
S3     1,261
Intraday Resistance Levels
R1     1,294-1,300
R2     1,309
R3     1.316-1,325

Technical Indicators

Name   Value Action
14DRSI  

41.0966

Buy
20-DMA   1300.80 Buy
50-DMA  

1307.40

Buy
100-DMA   1278.53 Buy
200-DMA   1247.75 Buy
STOCH(5,3)   9.073 Sell
MACD(12,26,9)   2.648 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.19/oz and low of US$14.97/oz. Silver settled up by 0.961% at US$15.12/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (15.12), breakage above will lead to 15.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 15.00-14.00 targeting 15.30-15.60-15.90 and 16.40-17.00; stop breakage below 14.00. Sell below 15.30-17.00 with stop loss above 17.00; targeting 15.10-14.85-14.50 and 14.00.

 
Intraday  Support Levels
S1     15.00
S2     14.75
S3     14.50-14.00

Intraday  Resistance Levels
R1     15.30-15.60
R2     16.00
R3     16.40-17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.598 Buy
20-DMA   15.26 Sell
50-DMA   15.53 Sell
100-DMA   15.15 Buy
200-DMA   15.06 Sell
STOCH(5,3)   6.240 Sell
MACD(12,26,9)   -0.0440 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$60.76/bbl, intraday low of US$59.47/bbl and settled up by 1.04% to close at US$60.20/bl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 60.00-62.50 with stop loss at 62.50; targeting 59.00-58.00 and 57.50-57.00. Buy above 59.00-56.30 with risk daily closing below 56.30 and targeting 60.20-61.00 and 61.70-62.50.

 
Intraday Support Levels
S1     59.50-59.00
S2     58.00
S3     57.50-57.00

Intraday Resistance Levels
R1     60.20
R2     61.00
R3     61.64-62.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.2052 Sell
20-DMA   58.38 Buy
50-DMA   56.19 Buy
100-DMA   53.82 Buy
200-DMA   61.45 Sell
STOCH(5,3)   60.923 Buy
MACD(12,26,9)   1.078 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1209/EUR, high of US$1.1245/EUR and settled the day down by 0.080% to close at US$1.1216/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1364), which become immediate resistance level, break above will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1200-1.1150 with risk below 1.1100, targeting 1.1270-1.1305-1.1330 and 1.1350-1.1380. Sell below 1.1270-1.1400 targeting 1.1250-1.1200 and 1.1175-1.1150 with stop-loss at daily closing above 1.1400.

 
Intraday Support Levels
S1     1.1200-1.1175
S2     1.1150
S3     1.1100

Intraday  Resistance Levels
R1     1.1270-1.1305
R2     1.1330
R3     1.1350-1.1380

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.167 Buy
20-DMA   1.1297 Sell
50-DMA   1.1335 Sell
100-DMA   1.1357 Sell
200-DMA   1.1469 Sell
STOCH(5,3)   8.157 Sell
MACD(12,26,9)   -0.009 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2976/GBP, high of US$1.3135/GBP and settled the day down by 0.0743% to close at US$1.3034/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2979) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is approaching oversold territory and giving negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.3070-1.2850 with targets at 1.3010-1.2980 and 1.2900-1.2850. Buy above 1.3010-1.2850 with targets 1.3070-1.3120-1.3200 and 1.3250-1.3300 with stop loss closing below 1.2850.

 
Intraday Support Levels
S1     1.3010-1.2981
S2     1.2900
S3     1.2850

Intraday Resistance Levels
R1     1.3070-1.3120
R2     1.3200
R3     1.3250-1.3300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

43.329

Buy
20-DMA   1.3169 Sell
50-DMA   1.3088 Sell
100-DMA   1.2922 Buy
200-DMA   1.2979 Buy
STOCH(5,3)   28.431 Sell
MACD(12,26,9)   0.0072 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY110.52/USD and made an intraday high of JPY110.94/USD and settled the day up by 0.194% at JPY110.84/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.42), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 111.00-111.90 with risk above 111.90 targeting 110.60-110.10-109.55 and 109.05-108.45. Long positions above 110.60-107.75 with targets of 111.00 -111.40 and 111.90-112.25 with stop below 107.50.

 
Intraday Support Levels
S1     110.60-110.02
S2     109.55
S3     109.05-108.45

INTRADAY RESISTANCE LEVELS
R1     111.00
R2     111.40-111.90
R3     111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.424 Buy
20-DMA   111.08 Sell
50-DMA   110.51 Buy
100-DMA   111.14 Sell
200-DMA   111.44 Sell
STOCH(9,6)   76.080 Buy
MACD(12,26,9)   0.0465 Buy

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